Caitlin Piasecki, United States Postal Inspection Service: I think the biggest thing is having the partnership with the banks to get us timely information and good documentation. So good SAR filings versus defensive ones. You know, if they have the same phone number calling in the same IP, that kind of stuff, we ask, like, build a good SAR for us so that we can, you know, cut off the head of the snake versus kind of chasing the tail, so to speak.
From the American Bankers Association, this is the A BA Banking Journal podcast. Welcome back. Today is today's episode is presented by nCino, and I'm going to turn the microphone over once again to my colleague Paul benda, who is the host of a relatively new podcast from a BA called the ABA Fraudcast, all about cybersecurity, fraud scams, and other, and other, and ways things banks need to know to protect their banks and protect their customers, critical information from Paul.
Earlier this week at a BA, we hosted our first ever check fraud symposium, bringing together experts from banks of all sizes, representatives from law enforcement federal banking agencies , the payment system, the vendor, community and consumer groups, all with a purpose of helping to strategize together on ways that we can continue to move the needle on check fraud and protect banks and their customers.
There will be a lot of future content coming out from, out from the ABA Banking Journal on these topics. But one of the speakers at this session was Caitlin Piasecki from the US Postal Inspection Service. She brought a fantastic perspective to the symposium on what the US Postal Inspection Service is seeing in terms of how mail theft intersects with check fraud.
Paul recently had a conversation with Caitlin on the podcast, and we wanted to bring this conversation to our broader ABA Banking Journal audience. So go ahead and have a listen. Paul Benda, ABA: From the American Bankers Association, I'm Paul Benda, and this is the third episode of our new podcast, the ABA Fraudcast. Last episode I talked about AI-enabled fraud and how easy it is to duplicate someone's voice.
My daughter Quinn made her podcast debut, the little star that she is, and it was scary how I could copy her voice, and it really shows how you need to be careful anytime someone calls you. They could have copied that voice and those scammers can use that against you. So if you haven't heard that one, I highly recommend you go back and listen to it. A lot of neat AI tricks in there. But today we're going to go old school. We're going to talk about check fraud.
Some of you may sound crazy because no one you know uses checks. When was the last time you wrote a check? You know, people tell me they can't even find their checkbook. But unfortunately, there's still a lot of checks out there. I want to back up and talk about checks and let's just think about them for a minute. What a check really is. So let me ask you a question.
Would you ever give a stranger a piece of paper with your name on it, your address on it, maybe your bank routing number and your bank account number? Maybe if they asked for it, your driver's license number, your Social Security number. No, no one in their right mind would ever give a stranger that information. And yet we do it millions of times a day with checks. I'm old enough to remember when I actually had my checks printed with my Social Security number on them.
You know, these are an inherently insecure form of payment. It's a piece of paper that is not encrypted that gets passed around by random people who can then access that information. And then it goes into our mail system and it can get stolen out of there or it can get stolen out of multiple places. Whether it's you drop it in some type of payment drop box at your rent place or some other place. There are people that will steal these checks. So why are we talking about check fraud though?
I thought you said no one uses checks anymore. The problem is check fraud or check usage is going down. You know, you are right. It is going down. The Federal Reserve tracks the number of commercial checks they process. Hard to find good data on consumer checks, but commercial checks are down 5. 4 percent in the last year, and almost 50 percent in the last 10 years. But we still process 11.9 million checks a day, 3 billion checks a year, and you know the annual value of those checks?
And these are commercial checks only, by the way, the annual value of those checks that are processed, $8.2 trillion. So I had to double check my numbers there and make sure I'm not misreading that website, but it is $8.2 trillion. What's really interesting though, is while the volume's down 50% since 2013, the total value of those checks that are processed is actually up so it's $8.2 trillion in 2024, $8 trillion in 2013. So we've got less checks, but higher dollar volumes.
So why are checks sticking around? Why are the values going up? Well, one, you know, no one sends small check payments anymore. We've got great electronic rails, to send those payments that we go out. You can use a peer to peer payment app like Zelle, ACH transactions are more readily available. So people in businesses are using that less often. You know, a lot of times my daughter's in club volleyball, you make payments to people, you Zelle them the money.
It's a lot easier to do than writing someone a check, but it is still one of the highest or one of the easiest ways to make a high dollar payment. You know, if you're having home renovation done, they probably don't want you to pay that $25,000 bill with a credit card. So they want you to write a check or they want you to wire money to them. It's easy. It's free for consumers and people are like, Oh, I'm just giving them the check.
Well, the problem is you're putting all that very sensitive information on a piece of paper that you then lose control of. It was fascinating. I was talking to another ABA staffer who was having home renovation work done and he knows about check fraud. And so he really didn't want to give them a check. And he said, well, how about I wire you the money? You know, give me your bank account number and I'll send you the money. It's a very secure way to transfer it.
And the contractor looked at him and said, well, I don't want to give you my bank account number. And so you're forced to give them a piece of paper with this, with your bank account number that can go anywhere you want it, anywhere they want it to go. And so that's the challenge that we've got. And then we still have, you know, especially, elderly folks, love to use their checks. My dad, who is 87, still writes checks, still sends me a birthday check, even though I begged him not to.
I set up automatic payments on his credit card. And he turned that off because he likes to write his check every month. So we've scared the bejesus out of them, in terms of electronic banking or using the internet. So they're really afraid that they're gonna get scammed or something bad's gonna happen using, you know, internet banking when that's actually vastly safer, than writing a check. And so this is what we've got, in terms of to deal with.
There's still a lot of commercial checks out there, still a lot of consumers that are writing checks. And the big problem is the criminals have figured out these checks are insecure. They can use this information and they can copy checks. They can alter checks. They can wash checks. They've got access to all different types of tools and capabilities that they never had before. You can buy anything you want on Amazon or Alibaba.
You can share information across the secure messaging apps that law enforcement can't break into, and they can sell different toolkits to actually build counterfeit checks, they can sell checks that they've stolen. And it's this whole ecosystem. And we're going to talk from, with the U. S. Postal Inspection Service to go in a little bit more detail on that. But trying to get an idea of what is the scale of check fraud that we're dealing with.
The best thing that we can look at is the Financial Crimes Enforcement Network called FinCEN, collects SARs, Suspicious Activity Reports, that banks file, and they file one when they deal with check fraud. So the SARs have more than doubled in the last few years. And in fact, in a six month period in 2023, FinCEN calculated the value of SARS filed on mail theft related check fraud. It was $700 million. Just in mail theft, check fraud related SARS that were filed. So $700 million.
That gives you an idea. This is a multibillion dollar problem that's out there. And if you talk to anyone, they probably know someone whose check has been stolen. They probably know someone whose mail has been stolen. Probably you've seen it on the neighborhood message boards that are out there. Everyone seems to know someone that's had a check stolen out of the mail. So where are they? Where are they getting them? From the mail, right?
They're robbing mail carriers, mail carrier robberies are up 600%, 600% from 2020 to 2024. And they're not just robbing them, those mail carriers to get the checks, they're robbing them to get what are called arrow keys. These are keys that your mail carriers carry around to open the blue collection boxes that you see in the street corners. If you steal one of these arrow keys, it can actually open up the blue collection boxes of an entire zip code.
And if you can't steal one from a mail carrier, you can buy one on Telegram. So we talked about the secure messaging apps. You can actually go out there and find these types of things for sale from, from other criminals. And they can go for as much as $4,000 for a certain zip code. So the Postal Service has taken this threat seriously. They recognize they've got challenges.
They recognize people are stealing mail from both the blue collection boxes, they're infiltrating post offices and steal mail directly from the post office, going to mail distribution centers. And so they've taken action. They've got project safe delivery. They've deployed over 20, 000 hard blue collection boxes. They're deploying 28, 000 electronic locking mechanisms, getting rid of those arrow keys, but there's 140, 000 blue boxes across the country. So it's going to take some time.
There's more efforts underway. So in this episode, I want to invite a special guest from the U.S. Postal Inspection Service. ABA has a formal partnership with USPIS. We publish multiple infographics educating people on how to protect themselves from check fraud and from mail theft. And you can find these infographics and other resources at aba.com/checkfraud. I want to welcome Caitlin Piasecki from the U. S. Postal Inspection Service here.
Caitlin has been a great partner for us, is really knowledgeable, knows all the stuff that's going on, really boots on the ground perspective. So Caitlin, thank you so much for being on here. Why don't you, just introduce yourself and tell us a little bit about yourself and your role at USPIS. Caitlin Piasecki, United States Postal Inspection Service: Okay. Great. Thanks, Paul. My name, like you said, is Caitlin Piasecki. I'm the mail theft program manager here.
I'm one of two of the program managers for the Inspection Service. So we cover kind of the nation, on all things mail theft. So programs like how to develop content for the field, how to help them with investigations and then kind of liaison with all the different groups like, you know, congressional affairs.
So kind of, we have a large purview and our goal is to really help the field have the tools and resources to do their job while also identifying trends, and patterns and, you know, educating the public and private sector that way. Paul Benda, ABA: So the reason we're talking to you today is we have really an epidemic of check fraud. It doubled in the past couple of years. It appears that it's doubling again.
I mean, we're now approaching probably more than a billion dollars in check fraud every year, at least that's being reported. And we think a lot of this is happening, or at least starting maybe potentially with mail theft. So, so what's going on with checks and the mail these days? What are you seeing Caitlin?
Caitlin Piasecki, United States Postal Inspection Service: Well, I think the biggest thing that I want to highlight is the transition to the cyber component related to mail theft related check fraud. Essentially, you know, the internet has made everything easier, recruiting, you know, how to teach people how to steal cars, how to access people's accounts, I think.
So, we've just seen kind of a tutorial, so to speak, on like encrypted communication platforms where they're teaching people, you know, how to target the mail, how to, you know, recruit employees at the Postal Service, employees at banks. And so we've just seen a huge influx in the complex nature these investigations have taken now, where previously maybe it was, you know, a localized group in a localized area. Now it's exploded where, you know, an organization in New Jersey.
could have access to a crew operating in LA, for example. So kind of a cross country scope, which makes it very difficult for us as law enforcement to figure out, you know, where, if the mail was involved, where and how, because the mail touches so many places as it moves. But then also, you know, jurisdictionally, the best venue. Locally, same thing.
If, you know, you're a victim of mail theft and you report it to your local police, you know, if the deposit happened there or in a different state, you know, jurisdictionally, things get really messy. And I think the appetite for prosecution on these cases, you know, really depends on dollar amount for us at a federal level. So really, it's like death by 1000 paper cuts.
And so how can we build a great case when it's organized chaos, for lack of a better word, really, because, you know, we have different groups operating collectively some days and other days, you know, they kind of go out on their own. So it's really how do you prove a conspiracy some of the time is very difficult and then how you build a great case for prosecution at whatever level it decides to stay.
So I think mail theft has just become a place where people, the mail has become a place where people think they can get checks, but it's no different than recruiting an employee at a bank or a check casher. I think it's just the internet knowledge of, you know, the mail is there. It's a good place to start.
So we've, you know, been really working to harden our targets, work to collaborate, to educate our workforce, and then obviously, put people in jail for committing mail theft and really the deeper. The harder crime really, which is bank fraud and wire fraud and those like financial cases.
And I think just that appetite collectively across the country right now for white collar cases is just maybe not as, I don't know the right word, you know, I think that increasing the, interest prosecutorially for these cases and, and kind of working, we have been working with
the U.S. Attorney's office to do that, to get more interest in getting kind of these maybe traditionally viewed as, you know, soft crimes turned to, to really what they are, which is a facilitation of many more other crimes, more violent as well. Hey everyone, Evan here. I'm gonna break into the conversation for a moment to bring you a. Message from our podcast sponsor for the month. nCino Disconnected systems, manual processes, and inefficient operations. Slow down financial institutions.
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And thanks to nCino for sponsoring this episode. I'm gonna hand the com microphone back to Paul now. Paul Benda, ABA: Right. So there's a lot to unpack there. I mean, so what I'm hearing from you is, you know, mail theft might be the entry point to get those checks, whether they're stealing from the blue boxes or the post office. They then put them on the internet and then it spreads across the country. You've got really complex cases that are out there.
So we're not dealing with Catch Me If You Can anymore, right? We're not dealing, you know, with a Leonardo DiCaprio movie where the guy was just kiting checks or altering checks. They might be out there, but, but that's not, that's not driving a lot of this fraud. Is that right? Caitlin Piasecki, United States Postal Inspection Service: Correct. I think at this point, the organizations have become online.
So really the it's borderless essentially and jurisdictionally challenging and very organized in a way that I don't think people realize just like, you know, recruiting the young people on the internet to give up their accounts, you know, collaborating on encrypted communications, believing they're free from law enforcement purview, you know, and I think that really facilitates kind of like the culture of, you know, sharing in covert groups, what and how to, you
know, defeat us as law enforcement. So I think we have to find a balance of like, educating the public while also protecting our trade craft so that you know, we're not teaching the bad guys essentially how we catch them either because they do learn as we learn. And as we charge and arrest them, they read our affidavits and figure out how to do it better next time. So I think it's just finding that balance like this is complicated organized crews. It's no longer just a one guy in his basement.
It's many guys, you know, doing many different things, including, you know, sim swaps and that kind of stuff to target somebody's high value account, get a fake I. D. You know, so the mail is a part of a much bigger scheme, I would say. And I think sometimes we just get the ... because we're the transport of the value item. I think we get all of the maybe scrutiny when really realizing how much more complex it is than just. You know, a piece of a check in an envelope in the mail, so.
Paul Benda, ABA: Yeah, and I, you know, I think you're raising a really good point. When people hear U.S. Postal Inspection Service, they just focus on the paper products, right? They don't, they don't realize that you guys are tracking these things on Telegram, that you're trying to build these conspiracies.
And I think people need to remember it's a, you know, a billion dollar criminal enterprise that these, you know, they have research analysts going through reading affidavits to try and figure out how they can better improve their criminal capabilities. And so it's a lot different than maybe what's been done in the past, but, you know, I know you get to see a lot of different cases. Do you have anything that's, you know, that's that you think would be interesting to share?
What are, what are some of the interesting trends or, or things that you're seeing out there, that maybe surprises you or surprise some of our listeners? Caitlin Piasecki, United States Postal Inspection Service: I think the thing I find most interesting is the level of scamming going on within the, encrypted communication platforms like Telegram, where we call them rippers.
Essentially, rippers are people who are targeting the scammers and they say they have a check, but they don't actually have the check. They're just ripping off somebody's post that is the real poster. So I think, people, Paul Benda, ABA: Scammers are, are being scammed themselves, right? Caitlin Piasecki, United States Postal Inspection Service: The irony of that, yes.
So we call the rippers the ones who scam the scammers and then the scammers are the ones selling the checks to the general public or those in their, you know, networks, not really the public per se, but essentially what I find most ironic is the complicated nature of these investigations where, you know, we get people who are like, Well, it's on the internet. Like, why can't you just, you know, arrest that person or take it down?
But it's not that simple, you know It's like proving: A, that it was an instrument stolen from the mail is step one for us, right? Because they do have access to checks in other ways. We aren't the only way that people get checks. But then 2, like who is the one posting that check.
Is it the real poster or is this the hundredth time it's been posted by seven different Ripper channels and then, you know, doing your due diligence to figure out who was behind the screen, just like any other type of cyber enabled investigation. It's really finding out who and what is happening. It's, it's much more complicated than just like this image is, you know, associated to this person or channel.
So I think, to me, that's probably the most interesting thing that I think is misunderstood in the, you know, general public, just how messy it is when you start getting into these chats, channels, supergroups, that kind of thing. It's, you know, 100,000 users.
And then some of the people who've become famous, like, because of their, you know, raps to commit things like Punch Made Def, for example, is one where he's like outlining how to commit wire fraud in a rap song, so really just kind of, there's just so many people in the arena now, whether, and there's some who are really good and then some who like read it off a different channel and think they could do it, you know, and it's very much like a upward promotion, so
if we don't get them at the first level where they are the collusive account holder, some of them then move up. And, you know, they start collecting cards and then they move up and they start, you know, finding the person to cook the checks for them and then they start a channel. So it's really kind of like combo combination of all these different factors coming together to make the perfect storm. So I think at every level we have to be prepared, you know, to really enforce.
You know, even, even at the lowest level with the banks, those money mule interviews, that kind of stuff, because those are the people who eventually start realizing I just made $10,000 committing check fraud. And then, you know, the more people get away with it, it becomes a trend because, you know, you tell your friend who tells his friend.
And so I think it's kind of like stymieing it at the beginning is really a huge part of our success at the top, you know, because that's who we want to go after as federal agents. We have to go after the ones operating the channels. You know, not necessarily the guy at the bottom cashing the checks, although not limiting those out, right, especially if they're involved in a sensitive position or they're a postal employee, a bank employee.
Obviously, we take those crimes very seriously when the abuse of power is involved, for sure. Paul Benda, ABA: Yeah, so it's like it's a whole culture. I mean, it's fascinating that there are rap songs about, you know, check fraud that are out there. And it's introducing new players into the space. So, you know, you guys have been a great partner, for ABA. Can you tell me a little bit about some of the work you guys have in the space combating, check fraud and mail theft?
Caitlin Piasecki, United States Postal Inspection Service: Yeah, for sure. I think the first thing I want to highlight is our partnership with FinCEN and our routine targeting of the mail theft tag SARs. So those that have the FIN-2023-mail theft , we are actively pulling those SARs, reviewing them, analyzing, seeing for trends, patterns, hot spots. We're also pulling SARs if they have the t. me link or anything kind of pointing us in a direction of an online threat actor.
And we are also, product safe delivery, which was deployed back in May of 2023, which was a direct response to crimes against postal employees in the mail stream. I know we didn't touch upon it, yet, but you know, a lot of carriers previously were being robbed for their, you know, postal keys, to facilitate the mail theft. And, you know, the violence against carriers was a huge issue.
The numbers are down, which is an indication that Project Safe Delivery is working in the sense of at least violence against carriers has decreased, but this initiative is a joint initiative with us in the Postal Service. Essentially, Project Safe Delivery is to target, protect postal employees in the mail stream as one, you know, component, prevent criminal activity through education and awareness is the next. And then lastly, enforce the laws that protect our nation's mail stream.
And I know you mentioned our partnership. That is one of our most valued components with prevention. So partnering with ABA to really educate the public. I know we have a lot of great infographics. But you know, how to keep your check safe. How to protect yourself from these crimes. I think, you know, we have bulletins for the general public, the bankers, and then for businesses. So I think a lot of different educational pieces from our lens as well as yours is huge, protecting.
I think we've deployed high security boxes and problem areas across the country. You know, we're constantly updating our technology, but people have to keep in mind it is a huge organization with lots of collection boxes everywhere. So it's no small feat to, you know, replace, you know, locks and keys and, update the technology. So, you know, the protect component, we are rolling out, you know, data based, and then the prevention.
Partnerships like this are huge for us to get out our education of the public and others, and especially the financial institutions, which are our number one partner in combating this crime. Certainly, we're also enforcing the laws. We have partnerships with, you know, TIGDA, FBI.
We have a NCFTA check fraud working group where we're really focusing in on the cyber component of check fraud with, you know, six federal agencies and then 28, you know, private sector agency, partnerships that are really helping drive, you know, that, online component, we've presented with the executive office for U. S. Attorneys.
So we're really kind of trying to educate them to the importance of taking these cases federally because of, you know, the, the violent aspect, the crews, the organizations, like this, isn't just a one off guy, you know, who's, you know, fishing out of a box anymore. Unfortunately, it's just much more, organized than that. And so we're really working hard. We've updated our reward program. So essentially there's up to $150,000 reward for those who provide ... Robbery of a carrier.
So a lot of ways that we're trying to encourage participation from the public, while also deterring the crimes, arresting those responsible. So we're really putting a lot in our, Project Safe Delivery, which, I'll share the link with you as well for the general public. They can access updates. They're done quarterly. But yeah.
For fiscal year '24, the number of postal related robberies decreased 27% compared to previous years, and the number of arrests for postal related robberies in fiscal year, versus previous are up 33%. So we definitely are focused on the right things. I think the biggest thing is having the partnership with the banks to get us timely information and good documentation. So good SAR filings versus defensive ones.
You know, if they have the same phone number calling in the same IP, that kind of stuff, we ask, like, build a good SAR for us so that we can, you know, cut off the head of the snake versus kind of chasing the tail, so to speak. Paul Benda, ABA: That's great. Those numbers. That's, that's a big improvement. So exciting to see you guys making progress in that, but let's take it down. Let's take it down a notch. Let's take it to, you know, people's street corner.
So, you know, we hear, you know, we hear from as a banker, about people saying, Oh, my checks are being, I even see this on my Next Door site, which is, you know, the local neighborhood site: Oh, they're stealing checks out of that post office. Oh, they're stealing checks out of that blue box, you know, that collection box. So if someone thinks that's happening, what should they do?
Caitlin Piasecki, United States Postal Inspection Service: Well, I think certainly report it to us via USPIS.gov/report, and we also have a 1 800 number I can share with you for that. So certainly report it to us, also your local police department. We partner a lot with local and state, law enforcement agencies, but so, it's not just us. So if you think a crime's happening in your area, please make sure you report it to your local police.
I think some of the simple things is, you know, pick your mail up upon delivery, you know, if you are, you know, going out of town, have a hold on your mail 'til you return. If you are using a collection box, we say, make sure it's before the last pickup of the day. So right on the box, it'll tell you, you know, 4 p. m. is the last pickup. Don't leave your mail essentially overnight in a collection box. If you can avoid it.
You know, same thing on the weekends, like pretty much minimize your window of opportunity, so to speak. So walking in the post office, if that's feasible for you. And again, if you're seeing, you know, patterns with that, we partner with the OIG. So essentially we investigate external theft, they investigate internal theft. So if when in doubt, you can also report it to the USPS OIG. But again, we work very collaboratively with them.
So for the most part, we're kind of in tune with different investigations in different areas. But, you know, just keep in mind, the more information you provide us, the more actionable complaints can be. So it's not necessarily helpful. If someone just sends a complaint with no information, like, you know, someone stole my mail.
Well when, where, who, how, you know, like those kind of factors really help us because the mail, right, it goes into a collection box or into a Post Office, but then it travels many places before it gets to its destination.
So the more detailed, people can be when they provide us with information, the better for our investigative capabilities, especially if they've taking a loss or, you know, the bank just getting that reporting immediately to us and to their financial institutions so that they can get the money back and start that recovery process, which I know you guys have a great system kind of built with ABA for that.
So I think that should hopefully help as well, get the communication between the banks, you know, streamlined in that way. For sure. Paul Benda, ABA: Those are some really good tips. I mean, I think that's, you know, that's a good point of knowing when that collection pickup is and not letting that mail sit overnight is really good. And the one I always tell people is, for God's sakes, don't put mail up in your driveway with the steal me flag up if you're going to put a check in there.
That is not a safe place to put your mail because they drive around and pick that right out of the mailbox. Caitlin Piasecki, United States Postal Inspection Service: Right. The best is bringing it inside. But again, like, especially anytime we recommend documenting that problem as much. Paul Benda, ABA: Yeah. The more information, the better. Exactly. Well, Caitlin, I really appreciate your time today.
You guys, like I said, you guys have been a great partner with us and thank you so much for, telling us some good tips and procedures and what's going on with mail left. Caitlin Piasecki, United States Postal Inspection Service: Cool. Yeah. Thanks for your time. Look forward to continuing our partnership in the future.
So thanks Paul. Paul Benda, ABA: As you can tell from my conversation with Caitlin, check fraud, like all the other types of scams and fraud we're seeing out there, is now on an industrial scale. Complex networks and whole ecosystems that are supporting it. Remember, this is part one of our check fraud series.
In our next episode, we're going to go into some more detail on how these checks are being altered, deposited, and counterfeited, what the check fraud claims process looks like, and what are some tips bankers can use to protect both their customers and their banks from these fraudulent checks.
Lastly, we'll go through the resources that ABA has, including the Fraud Contact Directory, our Check Fraud Toolkit and Frontline Training, and our product assessment of mitigation capabilities that you should consider deploying at your bank. If you can't wait 'til then, remember, go to aba.com/checkfraud, and you can find those items there. Well, thank you everyone for listening. Thanks so much to Paul and Caitlin for allowing me to share this conversation with our broader audience.
Again, if you wanna find more about the ABA Fraudcast and all the things we're doing on fraud, visit aba.com/fraud. Plenty of information there and you can subscribe directly to the fraud and get it directly onto your devices. Thanks again to nCino for sponsoring this episode. We'll be back with you again very soon.